PwC Australia has announced a reduction of 338 positions due to a combination of factors, including a slowdown in economic growth and a tax scandal that has negatively affected the firm’s reputation in the country. This decision is a reflection of the company’s diminished scale, evolving market conditions, and the repercussions of recent events.
The tax scandal led to a public outcry after it was revealed that a senior partner, who served as an adviser to the government, shared information about forthcoming tax law changes with colleagues pursuing business from US technology companies. This revelation resulted in various PwC clients, both from the public and private sectors, suspending their contracts with the consultancy and intensified the scrutiny on the influence of the Big Four consulting firms in Australia.
As a consequence of the scandal and the evolving landscape, Westpac, one of Australia’s major banks, terminated its longstanding relationship with PwC, which had been its auditor since 2002. Westpac emphasized that this move was in line with best practices of rotating auditors and clarified that PwC was not invited to reapply for the role.
Furthermore, PwC is also reducing its workforce in the UK, eliminating approximately 600 positions. The firm’s UK chair, Kevin Ellis, stated that the objective is to implement a redundancy round rather than postponing or canceling job offers to hundreds of recent graduates and school leavers.
The decision by Westpac to sever ties with PwC underscores the lingering concerns of companies regarding potential reputational damage associated with the consultancy. It remains a significant development in the aftermath of the tax scandal and its implications on PwC’s business relationships.